Zimmer fires back at Men's Wearhouse

By David Kaplan |
June 26, 2013
| Updated: June 26, 2013 4:57pm

Men's Wearhouse CEO George Zimmer, far right, greets salesmens (from center right facing) Mike Emini, Tim Henning, as new CEO Douglas Ewert , back shown and store manager, Sani Tongol, far left looks on at the San Francisco's downtown store on Market St. Zimmer will continue to be the company's spokesperson. (Photo by Vasna Wilson/Freelance)

Photo By Vasna WilsonWilsonManish Tandon/Freelance

Portrait of Men's Wearhouse CEO George Zimmer, left, who is passing the reins to Douglas Ewert at the San Francisco's downtown store on Market St. Zimmer will continue to be the company's spokesperson. (Photog by Vasna Wilson/Freelance)

Photo By Vasna Wilson WilsonManish Tandon/Freelance

Men's Wearhouse says George Zimmer has trouble giving up the reins.

Photo By Vasna WilsonWilsonManish Tandon/Freelance

Portrait of Men's Wearhouse new CEO Douglas Ewert, left, and founder, chairman and former CEO George Zimmer at the San Francisco's downtown store on Market St. Zimmer who is passing the reins to Ewert will continue to be the company's spokesperson. (Photo by Vasna Wilson/Freelance)

Photo By Vasna WilsonWilsonManish Tandon/Freelance

Portrait of Men's Wearhouse new CEO Douglas Ewert, left, and founder, chairman and former CEO George Zimmer at the San Francisco's downtown store on Market St. Zimmer who is passing the reins to Ewert will continue to be the company's spokesperson. (Photo by Vasna Wilson/Freelance)

Photo By Vasna WilsonWilsonManish Tandon/Freelance

Portrait of Men's Wearhouse new CEO Douglas Ewert, left, and founder, chairman and former CEO George Zimmer at the San Francisco's downtown store on Market St. Zimmer who is passing the reins to Ewert will continue to be the company's spokesperson. (Photo by Vasna Wilson/Freelance)

Photo By Vasna Wilson WilsonManish Tandon/Freelance

Portrait of Men's Wearhouse founder, chairman, spokeperson and former CEO George Zimmer at the San Francisco's downtown store on Market St. (Photo by Vasna Wilson/Freelance)

Photo By Ben Margot

FILE - In this Thursday, May 6, 1999 file photo, George Zimmer, second from left, gestures to Andy Dolich prior to a meeting, in Oakland, Calif. Men's Wearhouse Inc. says it has dismissed Zimmer, its founder and executive chairman. In a terse release issued Wednesday, June 19, 2013, the company didn't give a reason for the abrupt firing of Zimmer, who built Men's Wearhouse from one small Texas store using a cigar box as a cash register to one of the nation's largest specialty retailers in men's clothing, with 1,143 locations.

The battle of words between George Zimmer and Men's Wearhouse heated up even more as Zimmer fired back with a letter today.

And an analyst who has been following the conflict speculates that Zimmer is considering a leveraged buyout of the company.

On Tuesday, Men's Wearhouse provided details on why last week it terminated Zimmer as its executive chairman. It painted a picture of Zimmer as a person who could not accept that he is no longer CEO and trying to regain control.

Today, Zimmer responded with letter titled "Open Letter from George Zimmer to the Men's Wearhouse Family," and he denied those claims.

The company, Zimmer wrote, is making him out to be an "obstinate former CEO, determined to regain absolute control by pushing a private transaction for my own personal benefit and ego. Nothing could be further from the truth."

Zimmer did note that he wanted the company to "at least study" a broader range of alternatives for the company beyond selling its K&G discount clothing division, "including the possibility of a going private transaction."

The board refused to even discuss the topic, Zimmer wrote, and instead took steps to "silence" him.

Zimmer wrote that the board should be more open to considering a "full range of possibilities" for the company's future.

Also today, Richard Jaffe, an analyst at Stifel Nicolaus who has been following the conflict, published a note to investors in which he said he has gained additional information on the recent circumstances "after we had the benefit of meeting with CEO Doug Ewert" in New York.

While he has no knowledge of any negotiations or discussions, Jaffe writes, "recent information supports the idea that Zimmer is considering a leveraged buyout of MW. This has likely fueled recent share appreciation."

However, Jaffe wrote, "we do not believe that a buyout is likely or that a bid is pending."

Current Men's Wearhouse management "has unanimous board support and is not in favor of a buyout," wrote Jaffe who noted that Zimmer has only 3.5 percent of outstanding shares of the company.